Financial Statements Paper
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Financial Statements Paper
In this paper the discussion of accounting and the guidelines used in an accounting department. The details collected for keeping the records in an organization. How to analyze all the different transactions with record keeping in a corporation. Defining the basic assumptions, the principles, and constraints for accounting. What the Chief Financial Officers experts from his or her accounting department.
The purpose of the accounting is to know the economic growth of each company. Accounting is not just for counting the numbers or the money earned. The Chief Executive Officer and Chief Financial Officer will know what is happening financially to his or her organizations. Accounting provides all the financial information and expenses and revenue the company has earned. Accounting is and an information system design to communicate, identify and record all economic events within any organization to the interest of stockholders and stakeholders. To know of the accounting process is very important to all organization. The keeping of accurate records and bookkeeping is necessary to operate a business. Developing an accounting department in any company or organization is always needed. The structure of the accounting department is also important. The balancing a check book or paying monthly bills will give he or she help in the accounting of a company. Keeping up with assets, balancing the books and the counting all the revenue earned is a part of accounting.
The four basic assumptions that are always used by an accountant in any organizations. Each assumption plays an important role in making any decision for the company or organization. One assumption does not mean more than the other, each one is just important. Know when to use the right assumption is just important.
Monetary Unit- is a transaction use for the data capabilities to express in a monetary way, which is always used for accounting.
Economic Entity-With this assumption any economic event should identify with the accountability in a particular unit.
Time Period- this assumption will divide the economic business life into false time periods.
Going Concern- This assumption is to continue with the operation as long as the operation will carry out the objectives and commitments exist at that time.
The three basic principles of accounting are cost, full disclosure and revenue recognition.
Revenue Recognition- is the money earned at the point of sale.
Full Disclosure- this requirement that all organization disclosure any everything that will change the finances of his or her investment or creditors.
Cost- this principle would have all assets to be recorded at the historical